Waitrose Newspaper Give-away…Part II

The effect of the myWaitrose scheme on the Oundle Market Place continues to stir controversy.

Since we last went to press, Mr Sawford has written to all MPs with a local Waitrose, urging them to ask the chain to alter the scheme in the “spirit of fair competition”. He asked MPs to write to Mark Price, the managing director of Waitrose, so as to indicate to him that “his company … [may be] acting in a way that will further destroy the British high street”. In a letter addressed to Mr Cant, Mr Sawford said that amendment of current British anti-monopoly law “may be something that a future Labour government should consider”.

This did not go down well with his party, and Shadow Business Secretary, Chuka Umunna was forced to issue a retraction, stating that “it doesn’t represent party policy, [Mr Sawford] is a constituency MP raising a local matter.” Mr Umunna also said that he “didn’t have any issue” with the current myWaitrose loyalty scheme.

When the Chronicle last reported on the business competition between Oundle News and the new Waitrose, Mr Sawford had dismissed the letter from Mark Price, the Chief Executive of Waitrose, as “wholly inadequate” and “[failing] to respond to the points made to them”.

He wrote a letter to the Office of Fair Trading (OFT), detailing the problems referred to him by Mr Cant. The OFT’s response that Waitrose’s conduct did not constitute a violation of the Competition Act 1988. They cited as reasons for this, Waitrose’s low share of the grocery market, which nationwide stands at about five percent. They also questioned whether Waitrose’s behaviour constituted “abuse” of market position, since it is “fairly common commercial practice” to offer free or discounted products; indeed they maintained that “in many instances such practises are likely to benefit consumers”.

Recently, Waitrose raised the threshold for the myWaitrose loyalty card scheme from £5 to £10, which accords with the predictions of Chris Gamm, who wrote in the Retail Newsagent last October that “industry insiders have stated that the threshold for a free paper will need to rise to £15-£20 if the deal is to continue.” As predicted, the original myWaitrose deal was fundamentally an unsustainable offer.

Mr Sawford has undertaken to “draw the attention of [his] colleagues in Westminster to this issue and encourage them to make known their own dissatisfaction”.

Mr Cant also wrote to the Department for Communities and Local Government (DCLG), about his concerns. For their part, the DCLG referred to the measures which they had taken to safeguard high street business, such as the appointment of Mary Portas as high street czar, and disavowed responsibility for Mr Cant’s specific situation as a “local matter”.

The opposition to Waitrose in this debate has not come solely from Mr Sawford, or even from the Labour Party. For example, Thomas Pursglove, the Prospective Parliamentary Candidate for the Conservative Party in Corby and East Northamptonshire, intimated his support for Mr Cant very early on.

And, more prominently, the former Conservative Shadow Health Minister, Ann Widdecombe, referred specifically to Oundle in her Daily Express column on April 16 as a site of supermarket “bullying by the big boys”.

While the affair has made some superficial impact with both Government and Opposition, Mr Umunna certainly wants to keep it closed.
Mr Umunna praised Waitrose for promoting “the type of [business] practices we want to promote”, and the Deputy Prime Minister also recently remarked that retail businesses ought to aim to construct a “John Lewis economy”.

In the Daily Telegraph, it was reported that the Prime Minister had described Waitrose customers as more “talkative” than those of other supermarkets, and that, according to the retail research company Verdict, 56.4% of Waitrose shoppers are in the AB socioeconomic group.
The perception that it is perhaps more respectable to patronise Waitrose than other supermarkets, has very little to do with the impact on local economies.

The local issue is not closed, and Mr Cant has a very low opinion of the way that the national press, for instance The Financial Times, has turned the issue, in his words, into a “political spat”. He felt that there was some drift away from the principal concern, which was that the myWaitrose scheme constituted a “targeted promotion” in Oundle, quite as well as being a development “happening on a national scale”.

As Mr Sawford put it, Waitrose ought to be a “good neighbour to local businesses”; presumably this might reasonably be expected of a major grocery franchise. But for Mr Cant, this has not been in evidence.

By Richard Taylor